Is Freeport-McMoRan's US-Based Footprint An Advantage? Analyst Upgrades Stock Amid Copper Import Tariff Risk

On Thursday, J.P. Morgan analyst Bill Peterson upgraded Freeport-McMoRan, Inc. FCX to an Overweight rating from Neutral and raised the price forecast to $52 from $48.

The bullish stance reflects the analyst’s view that tariff-related factors will sustain premium pricing for the company’s U.S.-based operations, alongside long-term supply constraints that support a strong pricing environment across the industry.

Since President Trump’s February 25 announcement that the Department of Commerce would assess whether U.S. copper imports present a national security risk, COMEX copper has maintained an average premium of approximately 10% over LME prices, adds the analyst.

Peterson notes that the review is still in progress, with a conclusion expected by November 22.

Read: Copper Surges As Arbitrage Opportunity Drives US Imports

This is poised to directly benefit Freeport-McMoRan’s U.S. operations, which contribute around 10% of its operating profit for FY24 and an even higher 20% of post-tax earnings due to net operating loss (NOL) benefits, adds the analyst.

Peterson notes the trajectory of Trump 2.0 trade policy suggests a high likelihood of protective measures for U.S. copper imports.

Nevertheless, even if such policies do not materialize, Freeport-McMoRan still remains well-positioned compared to pure-play peers to capitalize on near-term upside opportunities, adds the analyst.

The analyst sees an attractive risk/reward balance given the the expected resumption of concentrate exports and record gold prices boosting by-product credits at the Grasberg mine.

Going forward, Peterson says that his Commodities team projects widening supply deficits this year and accelerating into the next decade, reinforcing a favorable long-term outlook for copper pricing.

Investors can gain exposure to the stock via Sprott Copper Miners ETF COPP and Themes ETF Trust Themes Copper Miners ETF COPA.

Price Action: FCX shares are down 3.24% at $39.38 at the last check Friday.

Read Next:

• Goldman Sachs Sees Copper Imports Increasing Ahead Of Tariffs As FCX Positions To Benefit

Photo via Shutterstock.